Why the UAW Opposes Permanent Normal Trade Relations Status for China

The human rights situation in China is getting worse.
Supporters of permanent normal trade relations (PNTR) status for China maintain that expanding trade between the U.S. and China will lead to a more open and free Chinese society. Yet, under President Clinton's policy of "constructive engagement," U.S.-China trade has expanded dramatically, but the human rights situation in China has gotten worse, not better.

In its annual report on human rights, the U.S. State Department said the human rights situation in China "deteriorated markedly" in 1999. Indeed, at the very same time China was seeking entry into the World Trade Organization (WTO), the Chinese government intensified its repression of human rights, including freedom of speech, freedom of association, freedom of the press and freedom of religion.

Violence against women - including coercive family planning practices such as forced sterilization and forced abortion - increased.

The Chinese government stepped up its crack down on democratic dissidents, labor rights activists, and Christians, Muslims and other people of faith.

Basic worker rights are non-existent in China.
Chinese workers have no right to form or join free trade unions, and strikes are outlawed. The Chinese government routinely persecutes workers who speak out about work-related issues. And the U.S. State Department reports that official repression of labor leaders has increased over the last few years.

Without basic labor rights, China's workers have no leverage to improve their wages and working conditions.

Chinese workers are subjected to dangerous working conditions, including deafening noise, unprotected machinery and exposure to toxic chemicals.

Wages are abysmally low. The average annual wage for a factory worker is only $1,000, and that's before the employer deducts fines, fees and the costs of employer-provided meals and housing. A "good-paying" factory job with a company like General Motors pays about 59 cents an hour.

Child labor and forced labor are commonplace in China. An estimated 4 to 5 million Chinese workers are in "re-education through labor" camps.

The China WTO deal will cost America jobs.
Supporters of the China WTO deal claim it will increase U.S. exports to China and create new jobs for American workers. But, then, the free trade crowd made the same promises about NAFTA. They were wrong on NAFTA, and they're wrong on the China WTO deal.

In a special report to the U.S. Trade Representative, the U.S. International Trade Commission projects that the China WTO deal will cause a significant decrease in U.S. automotive exports to China. That's because the China WTO deal will give multinational corporations powerful incentives to shift investment, production and jobs from the U.S. to China to take advantage of China's abysmally low wages and absence of meaningful labor and environmental protections. In short, the China deal is like NAFTA - only worse.

U.S. automotive trade with China shifted from a $521 million surplus in 1993 to a $906 million deficit in 1998. GM, Ford, DaimlerChrysler and Delphi Automotive Systems already operate plants in China and have plans for expanding operations. The China WTO deal will accelerate the surge in the U.S. automotive trade deficit with China, causing the loss of thousands of jobs in the U.S. auto industry.

China accounted for $68 billion of last year's record shattering $271 billion U.S. trade deficit. A study by the Economic Policy Institute projects that if China joins the WTO, the U.S. trade deficit with China likely would soar to $104 billion in 2002, resulting in the loss of 600,000 U.S. jobs - mainly in manufacturing.

The "product specific safeguard" provision of the China WTO deal will not protect U.S. workers against job losses due to import surges from China. There is absolutely no requirement or obligation on China or the United States to utilize this provision in response to import surges. The provision is completely discretionary and, therefore, ineffective.

China consistently violates trade agreements.
U.S. trade officials openly acknowledge that China has consistently violated previous trade agreements, including the 1992 Memorandum of Understanding that was supposed to put an end to China's discriminatory auto and aerospace industrial policies and trade practices.

Given China's track record of violating international trade agreements, there's no reason to believe that, as a member of the WTO, China will finally decide to play by the rules. Indeed, Chinese officials have already repudiated parts of the WTO accession agreement they negotiated with the Clinton Administration last November.

The China WTO deal weakens America's hand.
Supporters of the China WTO deal argue that the United States will be in a better position to take action against unfair trade practices if China is a member of the WTO and subject to its dispute resolution procedures. In fact, if China joins the WTO and is granted permanent normal trade relations (PNTR) status, the U.S. will give up its ability to take strong action against Chinese trade practices that discriminate against American made products.

Today, the U.S. government has a variety of tools - section 301, super 301, anti-dumping laws and other provisions - it can use to take action against unfair trade practices by China. Because access to the U.S. market is so important to China, we could have significant leverage in bilateral trade disputes with China if the U.S. government took full advantage of these existing trade remedies. But if China joins the WTO and is granted PNTR status, the U.S. will no longer be allowed to use any of these remedies. Instead, the WTO will have the power to settle trade disputes between the U.S. and China.

The WTO dispute resolution procedures are likely to be ineffective against China's unfair trade practices for a number of reasons. The WTO rules do not apply to the myriad ways that non-market economies like China can discriminate in practice against products made by other countries. Moreover, the WTO procedures invite interminable delays before any relief is available. Finally, the WTO is unlikely to exert strong pressure against unfair trade practices by China because it is difficult to obtain a consensus among all the member nations of this worldwide trade organization.

What you can do.
The House Republican leadership has announced that it plans to hold the vote on permanent normal trade relations status for China during the week of May 22.

Both opponents and supporters of PNTR status for China agree that, at this time, the vote is too close to call.

In the weeks ahead, you can count on the fact that your U.S. Representative will hear from Corporate America on this issue. In fact, the Business Roundtable, U.S. Chamber of Commerce and other business groups are running a $12 million advertising and lobbying campaign to win congressional approval for PNTR status for China.

But while Corporate America has the money advantage, we have the people advantage.

This week, take a few minutes to make sure your U.S. Representative knows where you stand on permanent normal trade relations for China.

Don't give China a blank check.
Tell Congress to vote NO
on PNTR for China.